‘Affordable Rent’? Of course says Boris. How about £305 a week?

The original version of this post was based on information supplied by the GLA under Freedom of Information, some of which proved to be wrong.  The post has therefore been revised to take account of the correct information since supplied by the GLA.  Our apologies if any confusion has been caused.

Despite all the talk of transparency, it has taken several Freedom of Information requests to get information about the rents that are likely to be charged for homes in Boris Johnson’s ‘affordable rent’ programme in London.

Arguments deployed by the mayor have included that the information is commercially sensitive and that it would be too expensive to collect.  The mayor, who runs the investment programme in London, is still saying that information cannot be provided which shows how the rents vary according to different bedroom sizes, and has not yet provided information about how many previously socially rented homes have been converted to ‘affordable rent’ to help pay for the programme.

The information requested would seem to me to be the basic requirements of a monitoring system.  Without it, it would be impossible for a responsible public authority to demonstrate value for money and that the scheme as a whole is meting housing objectives, for example the mayor’s commitment to provide more family homes.  It is also a basic requirement that the information should be made public so that there can be scrutiny of the programme.  And of course the delivery agents, predominantly housing associations, are notoriously secretive about their development programmes and are not themselves subject to Freedom of Information.  ‘Affordable Rent’ is certainly not a transparent programme, indeed it is fair to say it remains shrouded in secrecy.

So what does the information that has been released tell us?

Data are provided for 60 providers delivering 23,872 homes (affordable rent and affordable home ownership together, this number is not broken down), presumably over the next three years.  It is likely that some contracts have not yet been signed and so are not included at this stage.  The average annual gross affordable rent including service charge per unit is £9,454.  The average market rent for the homes is assessed to be £14,598 meaning that the average ‘affordable rent’ is 64.8% of the market rent.

The lowest charging provider has set rents at 35.1% of the market rent, which is within the range of normal social rents.  It would be fascinating to know how this was achieved or what particular features of this scheme made it possible.

The highest charging provider quotes average rent of £15,841 per unit per year, 70.8% of assessed market rent of £22,360.  That’s £305 a week – on average, so some rents from this provider will be even higher.

There is no explanation of the variation in rents and charges, but it is likely that pressure from some London boroughs and the determination of some providers to keep rents reasonable has had some effect.  Some of the variation will also be explained by the number of larger units in the scheme.

Provider contracts also vary in size, with the smallest being for a mere 14 homes and the largest 2,310 (at an average charge of £10,881 per annum).

The Government has maintained its position that ‘affordable rent’ homes will be let to the same pool of people as existing social rented homes.

But at an average charge of £182 a week, and some rising into the £300s, it is hard to see who many of these homes will be let to.

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8 Responses to ‘Affordable Rent’? Of course says Boris. How about £305 a week?

  1. Pingback: Rent chaos | Red Brick

  2. lfarrell says:

    I live in affordable housing in London which goes up by 9% every year, with a pay freeze for the last couple of years, I don’t know how I will cope. There is supposed to be a 60% of market rent cap but with the rents in London rising regardless of tough times this doesn’t seem to help.

  3. Pingback: Affordable rent shambles continues | Red Brick

  4. Pingback: 82,000 social rented homes hijacked to pay for ‘affordable rent’ | Red Brick

  5. Toby – good spot and thanks for pointing it out. The average market rent was £14.415 not £12,305, so the arithmetic now works I think. The post above has now been amended. Sorry for confusion caused by the typo!
    Tom – there is detailed guidance on how providers should calculate the appropriate market rent for each unit for the purposes of comparison. This should be available on the CLG website.
    Steve

  6. Toby Lloyd says:

    Steve

    Well done for digging out the data on this. But don’t your average rent figures suggest that the average affordable rent is 77% of market, not 65.9%? (9,501/12,305 = 0.772) Or have I just misunderstood the treatment of service charges in your calculation .

    Please forgive the nit picking, but given the amount Boris – and Shapps – quoted the ‘London average of 60% of market’ figure it’s critical we get this right.

    Thanks
    Toby

    Toby Lloyd
    Head of Policy

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  7. Please take a look at my blog – I am afraid the government is either totally out of touch with the reality of being a working class person in this country in need of affordable housing or its a constructed plot to socially cleanse us from certain area’s & contain the “needy” in a “just below the poverty line” & “enforced vulnerability” state.
    I’m so worried the Stealth discrimination & legislation has gone so far, its going to be too hard to turn it back.. BUT I have followers now & it seems there are also some people – such as Claire Fox at the recent NHF conference who are actually speaking out.
    I’m a normal single mother – working class & proud who has just had enough now & needs to raise awareness to the many many people like me who just don’t see what is going on.
    Thank you for the blog above.
    I’m not as eloquent – so am grateful when I find someone who can word things well.
    ps – the average salary for many of my friends each week is around £250.. I despair at how £182-£400 is seen by the government as “affordable”.

  8. Tom says:

    Quick question… when they say “market rent” is that the median?

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